Labor Secretary Wants To Reform Occupational Licensing

The Labor Secretary is advocating loosening or abolishing some occupational licensing that could help lower agency labor costs.

Labor Secretary Alexander Acosta is advocating loosening or abolishing some occupational licensing that states require for a variety of jobs from physicians to beauticians.

Speaking before the American Legislative Exchange Council in Denver, Acosta said while some licenses had valid reasons, “excess licensing hinders the American workforce.” He did not identify which occupational licenses should be adjusted or eliminated.

Occupational licensing reform a bipartisan issue

Federal concerns about state licensing requirements have been a bipartisan issue. The Obama Administration produced a policy paper advocating licensing reform in July 2015 and included funds for reform in its 2015 Labor Department budget proposal.

In January, the Brookings Institution published a report endorsing licensing reform arguing that “much of the impetus for licensing has come from parties with a financial interest in excluding others from their field and keeping prices high.”

Licensing reform in the Federal government

Coincidentally, Secretary Acosta’s remarks come two weeks after Shoshana Weissmann and C. Jarrett Dieterle published an article in National Review advocating the easement of licensing restrictions in the Federal government.

The authors cite a new Veterans Administration rule that allows nurses to prescribe drugs and work outside the direct supervision of doctors even in states that require nurse practitioner (NP) care to be supervised by physicians.

While 22 states enable NPs to independently provide care as they are trained and qualified to do so, regulations in several states restrict NP practice by requiring them to have an agreement with physicians to be able to take care of their patients, according a story in Forbes.

Until the VA instituted the new rule in January, VA required its medical facilities to meet the licensing rules of the state where the VA facility was located.

Weissmann and Dieterle believe that “the federal government should look for additional opportunities to reform licensing restrictions in federal agencies.”

Questions about occupational licensing not restricted to health care fields

The National Society of Professional Engineers has long advocated “that federal employees who are in responsible charge of engineering activities should be required by federal agency policy to be licensed professional engineers in at least one [state] jurisdiction.”

Currently it is up to each Federal agency to decide whether employees and contractors conducting engineering activities for their agency must be a licensed Professional Engineer (PE).

This brings us back to Secretary Acosta’s speech on Friday.

By removing or loosening licensing restrictions for Federal employees and Federal contractors working in Federal facilities, the government could lower its labor costs for the VA and other agencies, such as the Army Corps of Engineers, that currently restrict employment to licensed workers for a variety of jobs, from nursing to engineering.

Advocates of removing licensing, such as Dr. Morris Kleiner, argue that “occupational licensing has either no impact or even a negative impact on the quality of services provided to customers by members of the regulated occupation.”

According to the Washington Examiner, the Secretary told his Denver audience, which included state lawmakers, that “taking up this issue is one way that you, as legislators, can have immediate, consequential, and measurable impact. You have a tremendous opportunity to help create millions of jobs, without spending a dime. The Trump administration is committed to working with you to strengthen our economy and empower the American workforce.”

About the Author

Michael Wald is a public affairs consultant and writer based in the Atlanta area. He specializes in topics related to government and labor issues. Prior to his retirement from the U.S. Department of Labor, he served as the agency’s Southeast Regional Director of Public Affairs and Southeast Regional Economist.